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Algeria's Bouteflika in Moscow to strengthen ties

Algerian President Abdelaziz Bouteflika is in Russia to strengthen diplomatic and energy ties amid talks to create an OPEC-like gas cartel.

The presidents of Russia and Algeria, two of the biggest suppliers of natural gas to Europe, were to discuss energy ties in the Kremlin on Tuesday amid a drive to create an OPEC-like gas cartel.

Moscow is calling on Algiers to develop deeper energy co-operation. After a meeting between Russian President Vladimir Putin and his Algerian counterpart Abdelaziz Bouteflika in Moscow on Tuesday, Putin stressed that Russia and Algeria, which currently chairs the OPEC cartel of oil-producing countries, are the two largest natural gas producers in the world.

According to him, this is a reason to develop bilateral co-operation between the two countries. "We would not want our companies to experience problems on you rmarket once your country (Algeria) has signed free-trade agreements with the European Union in 2012," Putin said.

Bouteflika also said that he was not satisfied with the level of trade between the two countries. "In commercial terms, nobody is happy - neither you nor I," he told Putin. "We should find out why 2006 was better than 2007," he added.

Bouteflika told Russia's ITAR-TASS news agency in an interview published on Tuesday ahead of his meeting with Putin that gas exporters should "coordinate" their energy policies.

Asked about plans for a cartel, Bouteflika said: "It's clear that countries such as Russia, Qatar and Algeria already play a major role on international gas markets and they should coordinate their activities even more."

He also said that the Gas Exporting Countries Forum (GECF), set up in Tehran in 2001, should "play a more active role" and that gas suppliers to the European Union should team up against "restrictive laws" on energy imports.

Russia accounts for 45.1 percent of the European Union's gas imports, Norway 24.1 percent and Algeria 20.6 percent, with the latter's share expected to rise, according to EU data.

European officials have expressed concern over the prospect of closer energy ties between Algeria and Russia, particularly after Russian and Algerian state energy companies Gazprom and Sonatrach signed a cooperation deal in 2006.

"We can cooperate more on gas supplies to Europe," Algeria's speaker of parliament, Abdelaziz Ziari, told the Vremya Novostei daily.

"Algeria and Russia are among the world leaders in gas exports and our countries could coordinate their activities," Ziari said.

The GECF, whose members control around three-quarters of the world's known reserves, is to meet in Moscow later this year and analysts have said it could aim for greater coordination of prices and supplies.

Bouteflika said that the Organisation of Petroleum Exporting Countries (OPEC) had been formed in the 1960s to defend the interests of oil exporters and to ensure that oil revenues are shared out fairly.

"This lesson should not be forgotten" by gas exporters, he added.

Bouteflika's first official visit to Moscow follows a trip by Putin to Algiers in 2006 in which Russia wrote off Soviet-era debt in exchange for arms purchases by Algeria of around seven billion dollars (4.8 billion euros.)

But military ties between the two countries were clouded on Tuesday after Algeria said it wanted to return 15 Mig-29 fighter jets bought from Russia because of their low quality, Russian newspapers reported.

"The announcement of the annulment of the Algerian contract is the first major scandal in Russia's military-technical cooperation with foreign states," the Izvestia daily said.

On Monday, Kommersant cited an official from Russia's state United Aerospace Corporation saying that Russia could take the jets back but only if Algeria agreed to buy different planes.

Kremlin spokesman Dmitry Peskov said that military cooperation was on the agenda for the meeting between the Russian and Algerian presidents but declined to give details.